Media Economics. Reflection #5

July 28, 2008

“Media economics: applying economics to new and traditional media” tries to set out the broad range of economic principles and concepts needed to understand media industries and issues. The media issues and applications addressed in the book are widely drawn from both new and traditional media. As for me, the most interesting chapter is the one about consumer behavior.

The overlook of a consumer behavior presented by the book is pretty brief but provides enough information on how consumer allocates a limited budget between an unlimited number of goods, and covers few laws describing customers’ behavior. However, the examples authors use to support their ideas are usually a little bit dated, which makes me doubt the relevancy of the ideas stated, for today’s fast changing economics. The good thing about this situation is that it usually takes some time for consumers’ behavior to get changed, thus I hope, the book provides relatively fresh look at the consumer behavior patterns. From the other side, I believe that the book’s approach to the media economics is a little bit obsolescent.

Nevertheless, the chapter presents an interesting analysis of individual customer behavior patterns. One of the best examples is a problem of foreign films. Authors make a good point on the habit-forming nature of the cultural goods, which is clearly illustrated by the increasing demand for foreign movies with the changes of the individual’s tastes after viewing the ones. Chris Anderson draws pretty much the same conclusion while making an attempt to describe the growing demand for less common goods in his book, “The Long Tail”. However, Anderson goes even further. He thinks that offering more variety does not shift demand by itself. Consumers must be given ways to find niches that suit their particular needs and interests. There is a need for filters that can drive demand down to more obscure goods.

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2 Responses to “Media Economics. Reflection #5”

  1. kegill Says:

    One of the reasons I’ve asked y’all to read parts of this book is because economic theory has been based on scarcity, and media economic theory has been based on high barriers to entry (co$t). Digital technologies disrupt both assumptions, but it’s important to understand the “present” or “history” in order to be able to identify change.

  2. ivsyd Says:

    All the chapters were fine, I just liked the one about customer behavior best.


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